Mood Shifts Over California Growth

SAN DIEGO — To developers Greg Smith and Keith Johnson, regulations in California have been strangling growth and pushing up costs dramatically.

To development regulator Thomas Crandall, the new rules were necessary to prevent rampaging growth from ruining the state.

Florida legislators, now wrestling with a statewide growth management plan, know well that politics and construction become ever more entwined as an area grows.

In addition to trying to come up with a plan to cope with the soaring growth expected in coming years, the Florida Legislature is grappling with such growth problems as protecting that state's coastline from erosion and overdevelopment.

Still one of the top growth spots of the nation, California began struggling with a population explosion in the 1960s.

The push to develop and the rush to regulate resulted in a friction that forced companies to get more political, Smith and Johnson said.

Faced with ever-increasing regulation and requirements, development companies doing business in California began to come up with political strategies to protect their interests.

That involved hiring well-connected lawyers, lobbyists and public relations firms.

Crandall, director of the Southern Coastal District of the California Coastal Commission, said the battle between environmentalists and developers often is one-sided. ''In some respects it's unfair that those with the resources can so influence the decision-making process,'' Crandall said in San Diego during a recent seminar sponsored by the National Association of Real Estate Editors.

He said one developer recently earmarked $400,000 in his budget for a drive to get certain agricultural land rezoned for residential use.

The coastal commission -- environmentalists tend to refer to it as famous while developers term it infamous -- was created by citizen initiative in 1973 to regulate growth along California's coastline.

The commission, an outgrowth of the environmental movement of the late '60s and early '70s, took over growth planning from local jurisdictions along the coast, Crandall said.

The commission prepares a plan of development for an area and it gives it to local jurisdictions to implement, but the commission retains review author- ity and approves changes in the plan.

For Crandall, the approach worked well. Many developers viewed the commission as an enemy.

Now, Crandall said, the environmentalist movement in California is waning and the commission is losing power.

Development regulation intensified during the '60s and early '70s, Crandall said, and the momentum carried through the two terms of former governor Jerry Brown.

The Legislature also stripped the 12-member commission of its mandate to ensure the availability of affordable housing, he said.

The commission had begun using inclusionary zoning -- requiring developers to set aside a certain portion of each project for affordable housing. Developers considered that especially burdensome, Crandall said, and the issue became politically hot. The issue was defused when the Legislature took affordable housing out of the commission's domain.

The commission also prohibited the demolition of existing affordable housing, which usually occurred when developers wanted to clear land for higher-density projects.

Crandall foresees problems if growth management is relaxed.

The development industry, he said, ''is extremely persistent. No decision on land use is a final one if it's against what a company wants to do. Plans get changed.''

For developers Smith and Johnson, the easing and of growth controls cannot come too soon.

Smith said developers in San Diego County pay about $13,000 a house in impact fees.

Those fees have helped boost housing prices, but land-use restrictions probably have done more to raise costs, said Daniel Pegg, president of the Economic Development Corporation of San Diego, a privately financed group that works to lure industry.

Land costs have boosted the median housing price well above $100,000, he said.

Developer Johnson said that in the early 1970s a project could be under construction within six months of inception. As the regulatory process grew, the time to gain approval also grew.

One massive development, North City West, took more than a dozen years to clear the regulatory process, Johnson said.

Johnson said a recent change in state development laws now allows developers to start grading a building site as soon as that segment of the project is approved. The approval process continues while the work proceeds, he said. This saves six months' time and shaves about $1,500 from the price of each house.